This article was originally posted on Cointelegraph - an independent publication covering cryptocurrency, the blockchain, decentralized applications, the internet of finance and the next gen web.
As usual there is a massive overreaction from news coming from China. It’s possible to say that the basis of latest announcement that China is banning ICOs and exchanges is unreliable as there has been no formal statement from a government official.
The origin of the news was a Google translated article from a Chinese journalist, who apparently had spoken to some official. So the news is three layers from the original source.
Last time China banned or wanted to stop Bitcoin, they reversed the situation some months after.
Remember, China have many laws preventing capital flight, money leaving China, and we are not used to laws being verbal unsubstantiated statements, from non-government officials.
Are some people having an agenda to pump Bitcoin and spook the market? This news may actually be doing everyone a favour, as it is likely to be the last time you can buy Bitcoin at these levels. We have just had it gifted to us, a 30 percent return as BTC will dipped below $4000 and then returned to business as usual.
However Ether may not be so lucky
Bitcoin isn’t the issue here. It’s Ether, which is largely the hub of the ICO community, that is likely to take a pounding, with the Ethereum network struggling to keep pace with demand. ICOs are, after all, the pump for Ether, and it is likely that ETH will continue to rise for the time being.
Many ICOs are founded on poor ideas, and big ones could expose the market when founders fail to deliver what was promised, because they lack experience and have never run a business.
Many ERC20 token launches in the past six months are based on bad ideas and flawed thinking where tokenomics don’t work for investors.
First ICOs get called out, run out of money, and many have delivered nothing to users or investors. But for the time being, ICOs will pump ETH and in 2018 we will see 5000 ICOs.
Remember, Chinese investors are still out there, still buying into ICOs, and above all China is not the market, it is not Bitcoin, and the world of crypto will push on with or without them.
China has and will reverse the decision, they are pumping mining pools like everyone else, Russia, America, India and the enterprise takeover continues…
China banned Bitcoin, then changed its mind. China’s rules to prevent capital flight isn’t working. China cannot pick and choose the things it likes from capitalism, it’s capitalism that is paying to build China into what it is today.
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